"Mobile data traffic is soaring worldwide, more than tripling by 2018," said Jessica Ekholm, research director at Gartner. "New, fast mobile data connections (3G and 4G) will grow more slowly, from 3.8 billion in 2015 to 5.1 billion in 2018, as users switch from slower 2G connections and consume more mobile data."

In the third quarter of 2014, Gartner conducted a mobile app survey and asked 1,000 smartphone users in the U.S. and 1,000 in Germany about their mobile app usage habits.

"Germany and the U.S. provide two distinct mature markets from which we can make good comparisons about CSP strategies and their impact on broader consumer behavior," said Ms. Ekholm. The survey showed that German users are more restricted by their data plans, and are therefore less likely to watch videos or consume large amounts of data via cellular networks compared to the U.S. This means less revenue per user for CSPs in Germany.

When asked if they would wait until they get to a Wi-Fi area to download an app or stream content from a video app, 54 percent of Germans agreed and only 36 percent of U.S. respondents said yes. This is because more than 43 percent of U.S. users felt unconstrained by their data plans, while just 20 percent of German users felt the same. Thirty-eight percent of German respondents said they only get 500MBs with their monthly data plan. On average, Germans stream 10.6 minutes per cellular video session compared with 17.4 minutes for Americans.

CSPs must create and sell data plans with higher caps to increase their share of this growing market. "With video usage as a percentage of total data usage set to rise from 50 percent now to 60 percent by 2018, we should expect CSPs to offer the best-of-breed video experience to consumers," said Ms. Ekholm.

"This involves using video optimization technologies and caching content closer to the consumer. Contract plans that single out video traffic to allow users to reach a certain cap (without touching their contract data cap) will increase usage and revenue for CSPs and meet consumer demand for more mobile video."

The survey showed that families with children are driving mobile video usage. Users with children were the least concerned about using cellular data to stream video — surprisingly with almost no correlation to income. This is being encouraged by CSPs enabling plans with data sharing available between devices.

Moreover, streaming video over cellular networks isn't just for children and young adults. In fact the opposite is true — in the U.S., 47 percent of the 45 to 54 year olds surveyed stream 15 minutes or more of mobile video apps over cellular networks per session, whereas only 40 percent of 18 to 24 year olds stream more than 15 minutes.

"The results also showed that YouTube is increasingly being used to stream video for longer periods of time, rather than just for 'snacking'," said Ms. Ekholm. There is a very small difference between the percentage of smartphone users that use YouTube "less than five minutes" and "30 minutes or more" in the U.S. However, Germans were less inclined to stream videos for a longer period of time (in keeping with the trend of less usage) compared to the U.S., in line with more restrictive data caps.

"The key to obtaining long-term revenue growth for CSPs is how effectively they can market and sell the value of more expensive high-cap or unlimited data plans to their customers," said Ms. Ekholm. "The evidence is that once customers commit to a larger plan, their usage habits change significantly, resulting in longer-term revenue benefits for CSPs. This shows evidence of pent-up demand and an opportunity for those CSPs able to create the right package."